Rating

1) international long-term local and foreign currency rating of “BBB” with a negative outlook,

2) international short-term local and foreign currency rating of “F3”,

3) domestic long-term rating of “A (Pol)” with a negative outlook,

4) domestic unsecured and unsubordinated debt rating of “A (Pol)”.

On 27 October 2015 Fitch confirmed TAURON’s long-term ratings of “BBB” and revised their outlook from stable to negative.

According to Fitch, the revision of the outlook reflects the expected lower revenues of the TAURON Group on distribution starting from 2016 (EBITDA to decline by PLN 240 million in 2016 following the regulator’s reduction of WACC) and the planned acquisition of part of KWK Brzeszcze. Fitch has also indicated that there is a risk that the Company will breach its loan covenants embedded in existing financing agreements (exceeding the 3x net debt / EBITDA ratio in 2016-2019).

The outlook for the Company’s rating could be revised back to stable if its CAPEX is reduced and adjusted to the projected operating cash flows in the next few years. Such an outlook revision would also depend on the Company’s medium-term liquidity position improving as well as reducing the risk of breaching the 3x net debt / EBITDA covenant.